Date: February 1, 2026
Category: Economy & Personal Finance
Reading Time: 4 Minutes
The Union Budget 2026–27, presented by Finance Minister Nirmala Sitharaman, is best described as a “Builder’s Budget”—one that aggressively bets on infrastructure, next-generation manufacturing, and long-term economic capacity.
However, the biggest headline is not roads or factories.
It is the historic middle-class tax relief under the New Income Tax Act, 2025, effective April 1, 2026.
Below is the Best Buy–style breakdown of what this budget truly means for your money, your savings, and the stock market.
Budget 2026 Highlights — ET: Finance minister presents Budget 2026-27 with key announcements. Union Budget 2026 Highlights (ET)
Budget Circular 2026-27 PDF (Department of Economic Affairs) — annual budget circular notices:
👉 Budget Circular 2026‑27 – DEA Official PDF (24.48 MB)
The Headline Move: A Tax Revolution
The most impactful change in Budget 2026 is in personal taxation. The government has decisively pushed the New Tax Regime, making it far more attractive than the old system.
1️⃣ “Zero Tax” Limit Raised to ₹12 Lakh
This is a game-changing move.
- Earlier: Zero tax on income up to ₹7 lakh
- Now: Zero tax on income up to ₹12 lakh
✅ This directly increases disposable income for millions of salaried and self-employed individuals.
Important Note:
If your income exceeds ₹12 lakh, the slab rates below apply to the entire taxable income, not just the excess amount.
2️⃣ Revised Income Tax Slabs (FY 2026–27)
The exemption threshold is higher, and slabs are wider—reducing tax pressure on middle incomes.
| Income Slab (₹) | Tax Rate |
|---|---|
| 0 – 4 Lakh | Nil |
| 4 – 8 Lakh | 5% |
| 8 – 12 Lakh | 10% |
| 12 – 16 Lakh | 15% |
| 16 – 20 Lakh | 20% |
| 20 – 24 Lakh | 25% |
| Above 24 Lakh | 30% |
3️⃣ Other Major Tax Reliefs
- Standard Deduction:
✔ Confirmed at ₹75,000 for salaried employees - Homeowners Get Relief:
✔ Interest deduction now allowed for two self-occupied houses under the new tax code (earlier restricted) - Senior Citizens:
✔ Deduction limit for specified income/medical expenses increased to ₹1 lakh (likely replacing sections like 80TTB / 80DDB)
The Growth Engine: Infrastructure & Manufacturing
While tax relief boosts consumption, the government is simultaneously investing heavily in long-term growth assets.
Capex Increased for FY27: Infrastructure push details. Infrastructure Capex Increase (ET)
Key Numbers That Matter
- Capital Expenditure (Capex):
₹12.2 lakh crore
(Up from ₹11.11 lakh crore last year) - Fiscal Deficit (FY27):
4.3% of GDP
(Improved from the revised 4.4% of FY26)
👉 This shows responsible borrowing with growth focus.
Sector-Specific Boosters
- Tech & Semiconductors (Mission 2.0):
₹40,000 crore to move India from chip assembly to actual chip manufacturing - Bio-Pharma (“Bio-Pharma Shakti”):
₹10,000 crore to make India a global hub for complex biological drugs - Railways & Transport:
- 7 new high-speed rail corridors
- 20 new national waterways (starting with Odisha)
- Urban Housing & Infrastructure:
₹1 lakh crore Urban Challenge Fund for Tier-2 and Tier-3 city modernization
Budget 2026 vs Budget 2025 — What Changed?
| Feature | Budget 2025–26 | Budget 2026–27 | Impact |
|---|---|---|---|
| Basic Exemption | ₹3 Lakh | ₹4 Lakh | 🟢 Tax starts later |
| Zero-Tax Rebate | ₹7 Lakh | ₹12 Lakh | 🟢 Massive relief |
| Capex Allocation | ₹11.11 L Cr | ₹12.2 L Cr | 🟢 Higher growth push |
| Fiscal Deficit | 4.9% (Rev. 4.4%) | 4.3% | 🟢 Better discipline |
| Core Focus | Housing, Medical Colleges | Semiconductors, Bio-Pharma | 🔄 Shift to hi-tech |
Analyst Verdict: Where Is the Money Flowing?
From a Best Buy / Market Analyzer perspective, here’s how this budget tilts the market.
Likely Winners (Bullish)
1. Consumer Discretionary
(Cars, electronics, travel, lifestyle brands)
➡ With income up to ₹12L tax-free, consumption demand will surge
2. Infrastructure & Engineering
(L&T, Siemens, capital goods firms)
➡ ₹12.2L Cr capex ensures strong order books
3. Real Estate
➡ Tax benefit for a second self-occupied home boosts housing demand
4. Pharma & R&D-Focused Companies
➡ ₹10,000 Cr Bio-Pharma fund favors innovation-led pharma players
Watchlist (Neutral to Cautious)
Old Tax Regime Users
➡ The budget clearly nudges taxpayers toward the New Tax Act
➡ Traditional deductions (80C-heavy planning) are losing relevance versus flat tax relief
Final Take: A Structural Shift Budget
📄 Budget Speeches — Government Portal
👉 Union Budget Speeches (official government repository)
Budget 2026 is not a short-term populist budget.
It is a structural transformation budget that:
- Puts cash back in middle-class hands
- Builds future-ready manufacturing
- Maintains fiscal discipline
- Signals confidence in India’s long-term growth story
For households: Higher savings & spending power
For investors: Clear sectoral opportunities
For the economy: Strong foundations for “Viksit Bharat”
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. While we strive for accuracy, tax laws and government rules are subject to change. Please consult a qualified Chartered Accountant (CA) or financial advisor to understand how these changes specifically affect your personal finances before making any decisions.